Hardware Retailing

FEB 2018

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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The Inside Scoop on Outside Sales Need a few more pointers on outside sales? Here are some frequent hurdles that retailers have encountered. What are some of the biggest differences between inside salespeople and an outside sales team? Some of these are more obvious than others, such as an inside sales team being concerned with the immediate sale and assisting customers coming through the front door. However, both Koopman Lumber and Florence Hardware look to their inside sales team as a crucial piece of infrastructure for the entire sales process. The outside sales team is concerned with developing clients and drawing in new business. Inside sales can provide support by keeping tabs on long-term accounts or clients that have fallen off on orders. Outside salespeople can assist inside sales on special orders and large-volume orders from customers. How do you best structure incentives, bonuses and other compensation? Each business must decide how to structure outside sales pay, but both retailers we spoke to used a combination of salary and commissions to pay outside sales staff. Recent hires are paid more heavily on salary as they learn sales tactics and build a strong client list that will hopefully allow for greater success and sales numbers as time goes on. "In some areas of the country it makes more sense to pay a base salary with a smaller amount devoted to commissions. That's more of a safety net structure," Brookhouse says. One area Brookhouse emphasized was using a sliding scale for commissions based on gross profits. This structure allows salespeople to be rewarded for stronger efforts, bringing in new clients and maintaining long-term accounts and not emphasizing any one way to develop business. How do you best handle an outside salesperson's client list? Lists can be dependent on the work habits of an individual salesperson. How many clients a sales staffer has in their portfolio doesn't directly reflect how hard they work or how much they are bringing in on sales. Forty smaller accounts can bring in as much as 12 larger ones, just like one major account can need the kind of time and attention that simply can't be translated to managing smaller clients. Keep in mind that larger clients, while great for sales numbers, also hold great importance in the health of your business and your outside salesperson. If a salesperson has only a few big-number clients, one loss could mean big changes. Larger producers might be able to live and die by fewer clients, but a diverse client base is more recession- proof and is less likely to leave gaps in sales figures. February 2018 | HARDWARE RETAILING 47

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